Esfahan Steel Company (ESCO) is the first and largest manufacturer and exporter of constructional steel products in Iran. The company exported 920,584 MT steel in current Persian year, mainly rebar (116,998 MT), beam (86,033 MT), Wire Rod (53,599 MT) and other steel (663,954 MT).
As per Iranian Privatization Organization, they are going to schedule transfer the shares of Esfahan Steel along with 5 other public companies to private companies. Most of the assets are under-performing and financially struggling.
Social Security organization holds the largest share of 56% of Esfahan Steel, followed by 16.6% shares held by The Steel Pensioners Fund and remaining shares are allocated for public.
The Steel Pensioners Fund is pushing to liquidate nearly all its under-performing shares across industries, as it is struggling to support its pensioners. Steel industry retirees have repeatedly staged protests in front of the parliament and the Presidential Office in recent years over delayed pensions.
The fund’s 16.67% stake in Esfahan Steel Company is also set to be offered in Mar’18, priced at IRR 750 per share and sold 10% in cash and the rest in eight-year installments. The price is 11% lower than ESCO’s current trading at IRR 850 on over-the-counter securities exchange.
ESCO is currently struggling with an accumulated loss of IRR 21.4-trillion ($455 million) against a nominal capital of IRR 33.18 trillion ($706 million). Its financial condition has made it a less-than-desirable buy for investors, forcing Iranian Privatization Organization to cut down the price offer on its block sale every time for the past three years.
When asked about the future effects on functioning of ESCO, Company sources said “No changes has been felt yet, ESCO will function as it used to function before.”
Iran’s Esfahan Steel Concluded 70,000 MT Billet Export Deal
Esfahan Steel (ESCO), one of the largest producer and exporter of billet and finished long steel of Iran has concluded an export deal of 70,000 MT billet at USD 499/MT for May’18 shipment. The destination of shipment is GCC.
Inputs taken from Planner and Financial Tribune
Leave a Reply